Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Business Resultsfor the fiscal year ended December 31, 2011
Yuji Otsuka, President
February 1, 2012
OTSUKA CORPORATION
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 1
(Millions of yen)
Consolidated Non-Consolidated
Amount Ratio to Plan
Change toLast Year Amount Ratio to
Plan Change to Last Year
Net sales 478,215 98.4% +3.2% 444,625 97.3% +2.7%
Operating income 23,095 110.0% +21.5% 20,925 107.3% +18.9%
Ordinary income 23,315 108.4% +19.5% 21,628 107.6% +18.3%
Net income 12,744 118.9% +19.9% 12,519 121.0% +25.0%
Summary of Business Results,January – December, 2011
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Others
867
483
4,654
4,836
46,456
1,518
7,761
5,160
FY 2011 Net sales(Millions of yen)
45
25
313
312
313
165
93
235
Number of employees
Sales and technology support for network-related equipmentNet World Corporation
Maintenance and body work for automobiles, and commissioned sales of insuranceOtsuka Auto Service Co., Ltd
Creation and commissioned shipment of direct mail materials, data management and processing as well as commissioned creation of Websites
Otsuka Business Service Co., Ltd
Comprehensive service and support for network systemsAlpha Net Co., Ltd
Emergency repair of PC and peripheral equipment and data recovery serviceAlpha Techno Co., LtdS &
S
Consigned software development, packaged software development and ERP consulting businessAlpha System Co., LTD.
Electronic communications construction and interior constructionNet plan Co., LTD
Development and sale of packaged softwareOSK Co., LTD.
S I
Business domainCompany nameSegment
Consolidated subsidiaries
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
The environment was characterized by a mild recovery in the globaleconomy, the European debt crisis and financial uncertainties.
Exports weakened, the yen remained strong, share prices were lower and interest rates remained at the same level.
Production showed signs of a slow recovery and there were concerns over power supply.
The number of corporate bankruptcies remained at the same level.
Investment in facilities and equipment showed signs of recovery.
3
The domestic economy is slowly beginning to pick up.
External Environment
IT investments are starting to pick up.
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
• System proposals that lead to cost reductions, improvement of productivity and strengthening of competitiveness
• Strengthening of customer contact and frontline
• Activities “participated in by all employees”
• Strengthening of accumulated business: “tanomail” and “tayoreru”
• BCP measures and proposals for reducing power consumption
OTSUKA Group’s Activities - 1
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
• Visit customers to confirm conditions, make utmost effortsto provide support.
• Free-of-charge repairs and maintenance of damaged equipment,free-of-charge provision of groupware service.
• Donations of surgical masks, disinfectant hand gel,and LED light bulbs.
• Relief money (“tanomail” “personal tanomail”,employees and OTSUKA CORPORATION)
5
The Great East Japan Earthquake — OTSUKA’s Responses
• Donation of LED lighting and tree-planting activities• Global warming countermeasures
(Provide carbon offset products, support tree-planting activities overseas) • OTSUKA environmental measures
Strengthen 3R (Reduce, Reuse, Recycle) activities,promote reduction of CO2 at the head office building
50th Anniversary of Foundation
OTSUKA Group’s Activities - 2
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 6
429,927463,493 478,215
16,09419,013
23,09516,42719,508
23,315
10,63112,744
8,782
0
100,000
200,000
300,000
400,000
500,000
FY 2009 FY 2010 FY 20110
8,000
16,000
24,000
32,000
40,000
Net sales Operating incomeOrdinary income Net income
Net sales and ProfitsConsolidated
(Millions of yen)
Net salesOperating incomeOrdinary incomeNet income
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
93.7108.0113.2114.9 114.5104.6
119.5124.7 118.3123.9
125.1110.7
0
20
40
60
80
100
120
140
1Q 2Q 3Q 4Q
FY 2009 FY 2010 FY 2011
7
Consolidated Quarterly change of Net sales
(Billions of yen)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
4,569
6,676
1,221
3,959
7,449
5,079
2,101
4,8775,381
3,629
9,011
5,293
0
2,000
4,000
6,000
8,000
10,000
12,000
1Q 2Q 3Q 4Q
FY 2009 FY 2010 FY 2011
8
Quarterly change of Ordinary income
Consolidated
(Millions of yen)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 9
1,1301,9422,300
214,576208,008200,938
262,508253,541226,688
0
100,000
200,000
300,000
400,000
500,000
FY 2009 FY 2010 FY 2011
463,493429,927
478,215
Net sales by segmentsConsolidated
SI business S&S business Other business (Millions of yen)
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106,257 106,981106,663
104,12698,04891,230
29,66528,07228,332
176,117200,135 203,852
0
100,000
200,000
300,000
400,000
500,000
FY 2009 FY 2010 FY 2011
432,919401,937
444,625
Net sales by 4 segmentsNon-Consolidated
(Millions of yen)SI related products Custom-made software, etc.
Supplies
Maintenance, etc.
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
-14.8-19.6
-5.4
23.7
-19.7
7.6
16.1
9.6
-5.9
6.65.5 2.8
-16.9
-4.2-7.7
-16.0-18.8
-10.4-9.1
11.1
1.7
2.5
7.5 7.9
5.0
-20.5
3.4
3.2
7.17.1
-0.7
7.3 8.5 7.1
8.5
2.6
6.67.1
3.20.1
-2.10.4 0.0
-0.9
2.3-0.8
-1.12.0 1.2
4.7
1.6 1.9
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0SI related productsCustom-made software etc.SuppliesMaintenance, etc.
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY 2008 FY 2009 FY 2010 FY 2011
11
( % )
Non-Consolidated
Quarterly Net Sales by 4 segments( % change year-on-year )
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 12
23.1
15.917.8
-4.6-4.9-7.5
-4.2-5.4 -5.2-10
-5
0
5
10
15
20
25C/F from operating C/F from investing C/F from financing
FY 2009 FY 2010 FY 2011
Cash flowsConsolidated
(Billions of yen)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 13
116,633108,255101,740
8,684 7,802 8,415
50.850.751.4
3.73.74.40
30,000
60,000
90,000
120,000
As of Dec. 31, 2009 As of Dec. 31, 2010 As of Dec. 31, 20110
15
30
45
60
Equity Interest-bearing debtEquity ratio Interest-bearing debt ratio
Equity andInterest-bearing debtConsolidated
(Millions of yen) ( % )
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 14
9.2 8.5 8.1 7.8 6.8 5.9 6.4
26.018.6
33.733.3
77.077.775.6
42.3
63.4
89.2
0.00.10.20.10.10.10.10.30.50.50.71.01.12.12.83.64.3 3.0%2.9%3.7%4.1%4.2%4.8%5.7%11.9%
21.9%
18.6%23.9%
26.6%
39.0%
45.3%46.0%45.4%
54.6%
0
20
40
60
80
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%
20%
40%
60%
80%Interest-bearing debt Non-operating expensesInterest-bearing debt ratio
2011年末の現預金残高434億円
Change of Interest-bearing debt and Non-operating expenses
Non-Consolidated
Cash at the end of FY 201143.4 billion yen
(Billions of yen)
IntroducedPC-LAN
Full Operation“DAISENRYAKU”(Centralization)
Started NewAccounting
System
Listed onTokyo Stock
Exchange
Operationof “SPR”
New HQBuilding
Full-fledgedoperation of
“SPR”
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 15
27.11% 28.58% 44.31%
27.94% 28.31% 43.75%
27.58% 28.83% 43.59%
0% 20% 40% 60% 80% 100%
FY 2009
FY 2010
FY 2011
Less than 1 billion of yen 1 to less than 10 billions of yen 10 billions of yen and above
Net sales structure on customers’ total annual business scale
Non-Consolidated
* “Less than 1 billion yen” includes public offices.
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 16
Manufacturingindustries
23.89%
Wholesaleindustries
21.32%
Buildingindustries
8.02%
Retailingindustries
4.41%
Education,Public offices
4.22%Service
industries29.87%
Lease, Creditfirms, etc.
8.27%
FY 2011
Sales breakdown by customers’ type of industry
Non-Consolidated
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 17
2,660
3,493
1,845
187
8,185
(32.5%)
(42.7%)
(22.5%)
(2.3%)
Personnel organization(regular employees)
Consolidated
As of Dec. 31, 2011
Technical personnel
Sales personnel
Corporate staff
Others
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 18
195.5202.4
187.9184.0
170.8151.7
134.0116.6
102.089.783.681.585.280.0
88.870.4
63.557.852.950.0
45.545.246.842.1
39.037.7
35.234.0
32.230.127.525.9
28.927.424.2
22.124.125.126.125.0
0
50
100
150
200
250
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
10
20
30
40
50
Net sales of Supplies and Maintenance agreement
Accumulated business sales share
Accumulated business sales share (%)
Non-Consolidated Growth of accumulated business
Net sales of Supplies and Maintenance agreementAccumulated business sales share
As reference (1992-1999)
Net sales of Supplies and Maintenance agreement(Billions of yen)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 19
0
100,000
200,000
300,000
400,000
500,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201160
70
80
90
100
110Net salesBreak-even point ratio
83.5%
Change of Net salesand Break-even point ratio
Non-Consolidated
(Millions of yen) ( % )
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 20
45,000
47,500
50,000
52,500
55,000
57,500
60,000
62,500
65,000
67,500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500Net sales per employeeOperating income per employee
Number of employees 6,621 6,316 6,272 6,251 6,236 6,222 6,294 6,297 6,379 6,585 6,736 6,778 6,760 6,684
Non-Consolidated
Change of Net sales per employee and Operating income per employee
Operating income per employee (Thousands of yen)
Net sales per employee (Thousands of yen)
Relative to 1998Net sales per employee increased 41.3%Operating income per employee grew 9.8 times
Operationof “SPR”
Full operation of“DAISENRYAKU”
Full-fledgedoperation of
“SPR”
(Difference to last year, -76)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 21
<Amount of Sales> (Millions of yen)
FY 2009 FY 2010 FY 2011
Amount AmountChange to Last year
AmountDifference to
Last yearChange to Last year
“tanomail” 92,990 100,980 +8.6% 107,934 +6,953 +6.9%SMILE 6,327 6,708 +6.0% 7,774 +1,066 +15.9%ODS21 33,073 38,778 +17.2% 40,680 +1,901 +4.9%OSM 40,826 43,887 +7.5% 47,113 +3,226 +7.4%
<As reference: Number of Sales> (Units)
Copier 24,240 27,003 +11.4% 29,153 +2,150 +8.0%(of whichColor copier) 18,144 21,703 +19.6% 24,296 +2,593 +11.9%
Server 32,389 36,405 +12.4% 37,582 +1,177 +3.2%PC 500,276 666,332 +33.2% 697,057 +30,725 +4.6%
Key strategic businessNon-Consolidated
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 22
100,980107,934
22,234
7,152
6,004
4,555
4,218
3,776
2,465
2,313
92,99089,192
82,493
71,088
59,062
46,369
33,036
19,885
9,6193,302545
2,5523,245
11,335
16,76625,212
0
20,000
40,000
60,000
80,000
100,000
120,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Accounts of “tanomail” 506 133,105 153,609 169,148 322,720 385,895 448,812 506,263 564,489 626,932 698,999 773,882 849,567
“tanomail” achievedsales of over
100 billion yen
Started “tanomail”
“MA tanomail”
“personal tanomail”
Procurement service for large company
“tanomail plus”
TANOSEE
Procurement ASP service
Private brand
Alliance withLION OFFICE PRODUCTS CORP.
Mail-orderservice forindividual
Non-“tanomail” MRO“tanomail”
Annual sales transition of “tanomail”Non-Consolidated
(Millions of yen)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 23
81208
304384
509 560638
722822
9031,039
1,162
40
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1.16 million peopleused services in 2011
Number of Users of Main Web Services (ASP)Number of Users of Main Web Services (ASP)
(Thousand people)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
<customer>
OTSUKA CORPORATION supports customers’ procurement duties across the board
Total support by OTSUKA CORPORATION
Information System Office
Server Room
Accounting Dept.
HR Dept.President's Office
General Affairs Dept.
Sales Dept.Office supply mail-order service
“tanomail”849,567 accounts
Procurement ASP service“tanomail plus”
115 companies
Office supply mail-order service for large company
“MA tanomail”19,261 accounts
Mail-order service for individual“personal tanomail”
217,872 membersMerchandisefor individual
Indirectmaterial
Corporate employees, general individuals
OfficeDirect material
(As of Dec. 31, 2011)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 25
Support Services for Procurement and Purchase Operations
Clients in which services were
introduced (Buyers)
Suppliers
OTSUKA CORPORATION
(“tanomail”)
Supplier A
Supplier B
Supplier C
Supplier D
OTSUKA CORPORATIONcloud computing service
“tanomail plus”
Services commenced in 2005Number companies in operation: 115 companiesPass-through amount: 47.1 billion yen (64.5% increase)
Applicant (factory)
Applicant (worksite)
Applicant (office)Approver (headquarters)
“tanomail plus”
The Internet
Orderapplication
Orderapproval
Inspectionprocess
Request for estimate
Approval of receipt and inspection
Inspectionconfirmation
Orderconfirmation
Response toestimate
Shipment process
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Future Plans
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
The Basic Principle and Mid-Term Plans
< Basic principle >• Grow with customers by realizing the Mission Statement< Mid-term plans >• Workforce basically remains flat• Strive to expand business by increasing revenues and
profitsAim to achieve 7% in operating income to net sales ratioand ordinary income to net sales ratio
• Cultivate new demand by utilizing customer information• Effective use of people/materials/money to improve per
head productivity
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
• The domestic economy may get back on a recovery trackfrom autumn onwards.
• Companies’ capital investment is starting to pick upgradually.
• Company needs for IT utilization, replacement andupgrades are brisk.
• Concerns over power supply and energy saving responseis even more crucial.
28
IT Market Forecast in 2012IT Market Forecast in 2012
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 29
Policies and Measures in 2012Policies and Measures in 2012< Slogan >“Live up to customers’ trust from a customer viewpointand vitalize office”
• Strengthen customer contact by placing greater emphasison one-stop solutions and one-stop support
• Identify IT needs and needs for saving energy
• Deepen ties with existing customers while cultivating newcustomers
• Promote comprehensive proposals and combined systemproposals
• Strengthen accumulated business
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Overview of Green University of Tokyo Project
(As of January 27, 2012)
Industry-academia cooperative consortium
Specification design WG Protocol standardization WGCommercialization WG
Concept WG Control verification WG Visualization WG
[Sectional meetings and working groups (WG)]
63 members (44 companies, 19 NPOs)
A shift toward practical business application phase based on the verification experimentsconducted at the Building No. 2 of Faculty of Engineering since 2008.
“Mini-Green University of Tokyo” Verification Experiment- Introduction Test at the OTSUKA’s Head Office Building -
Interview about the Green Universityof Tokyo’s verification experimentsthat realize university’s smart grid
Hiroshi Esaki (Ph.D. Professor,Graduate School, University of Tokyo)
Visualization by floor Visualization by light, air conditioning and socket
Total lights
Total airconditioning
Totalsockets
30
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Informing about Corporate Activities
31
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
General light bulbsFloodlights Halogen lights
Incandescent bulb 60W → LED 5.8W90% reduction
Fluorescent light 40W → LED 22W45% reduction
Mercury lamp 400W → LED 80W80% reduction
Strip lights
32
Wide Range of LED Lighting
Explosion-proof Lamp
IEC: International Electrotechnical CommissionTIIS: Technology Institution of Industrial Safety
Certified by IEC and TIISTunnel light
Acquired PSE certification (for the stabilizer)PSE: Product Safety of Electrical appliance and material
Street light
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
Power Reduction through PC Replacements
Laptop + LCD monitorWindows7
Approx. 60%reduction
33
Approx.111W
In the case of OTSUKA CORPORATION
Approx. 45W(Approx. 25W for
Laptop only)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 34
493,000478,215463,493
24,00023,09519,013
24,50023,31519,508
10,63113,55012,744
0
200,000
400,000
600,000
FY 2010 FY 2011 FY 20120
15,000
30,000
45,000
Net sales Operating incomeOrdinary income Net income
Plans of Net sales and profitConsolidated
(Plan)
(Millions of yen)
Net salesOperating incomeOrdinary incomeNet income
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 35
1,942 1,130 900
208,008 214,576 222,990
253,541 262,508 269,110
0
200,000
400,000
600,000
FY 2010 FY 2011 FY 2012
463,493493,000478,215
Plans of Net sales by segmentsConsolidated
SI Business S&S Business Other Business (Millions of yen)
(Plan)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 36
Start new stage of IT utilization !
Jissen (Practical) Solution Fair 2012
Copyright©2012 OTSUKA CORPORATION All Rights Reserved. 37
Start new stage of IT utilization !
Jissen (Practical) Solution Fair 2012
Dates:Tokyo
February 8 (Wed) – February 10 (Fri)Osaka
February 15 (Wed) – February 16 (Thu)Nagoya
February 23 (Thu) – February 24 (Fri)
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
CommunityCommunity
EmployeesEmployees
Customers
ShareholdersShareholdersBusiness PartnersBusiness Partners
We live up to ourStakeholders’ confidence
Copyright©2012 OTSUKA CORPORATION All Rights Reserved.
1. This material is intended to provide information about the business performance of fiscal year2011 and strategy of the OTSUKA CORPORATION and Group companies. It is not intended and should not be construed as an inducement to purchase or sell stocks ofOTSUKA CORPORATION.
2. Forward-looking statements in this material with respect to OTSUKA CORPORATION’s strategies,plans, beliefs, and other statements related to future trends and performance are not historicalfacts, and as such involve risks and uncertainties. Such statements are not guarantees of futureperformance. Actual results may differ considerably from projections due to unpredictable changes to the economic situation, and a number of factors. Key factors that could affect actual results aregeneral economic conditions, social trends, change of relative competitiveness in demand actionfor products and services provided by OTSUKA CORPORATION. Key factors that may affectbusiness performance are not limited to these items described here.
3. Statements in this document are based on the current beliefs, estimates and expectations ofmanagement. OTSUKA CORPORATION undertakes no obligation to update any forward-lookingstatements.
4. OTSUKA CORPORATION shall in no event be liable for any damages arising out of the use orinterpretation of this material.
Cautionary statement